Regionalism and Globalism Apec and its Implications for Australia

Abstract

This study investigates the practicality of APEC's open regionalism in dealing with the more sensitive areas of trade policy reforms such as agriculture. In order to examine the effectiveness of APEC in addressing agricultural trade liberalisation, the rice sector was chosen as a case study, especially from an Australian standpoint. Although not a major producer and exporter of rice in world terms, Australia's rice industry is extemallyoriented and exports nearly 65 percent of its output. The liberalisation of agricultural markets, including markets for rice, is one of the key trade policy objectives that Australia has vigorously pursued at all levels - multilateral, regional and bilateral. However, the liberalisation of markets for agricultural commodities such as rice cannot be studied in isolation. It was, therefore, necessary to locate APEC and its trade liberalisation agenda within the context of the debates on globalisation and regionalisation. Over the past two decades a strong body of literature on these two themes has emerged. The present study contains a comprehensive review of this literature and attempts to identify the most important theoretical trends, arguments and debates on the subj ect. Although APEC is a regional forum, it is quite distinct from all other existing regional trading arrangements. Its two core principles - open regionalism and non-discrimination - set it apart from both the North American Free Trade Area and the European Union. Whereas NAFTA and EU clearly discriminate against non-members in terms of market access and other benefits, APEC's trade liberalisation outcomes will allow greater access to regional markets not only for its member countries but also for exporters from all other nations. This key difference between APEC and other regional arrangements enables APEC to act as a bridge between regionalisation and globalisation. Globalisation implies the shift toward a more integrated and interdependent world economy. No other institution has done more to promote globalisation than the World Trade Organisation and its predecessor the General Agreement on Tariffs and Trade. Regional trading arrangements such as NAFT A and the EU have also contributed towards the creation of a globalised world economy, but their contributions are largely confined to their respective regions and may even be contrary to the WTO objective of multilateral and global free trade. The APEC free trade agenda, on the other hand, is not only consistent with the WTO goals but is even more ambitious. Nonetheless, this study has found that one of the key weaknesses of APEC is the absence of any enforcement mechanism. In keeping with the cultures of the Pacific Asian countries, it relies on consensual decision-making rather than on legally binding commitments. Its goal of free trade in the region by 2010 for developed countries and 2020 for developing country members is dependent on the voluntary actions of its members. The detailed case study of the rice sector demonstrates that the road to free trade in the region is full of political, social and cultural pitfalls. The will of the V111 governments in APEC countries is being sorely tested by pressure from various lobby groups in their respective countries. The study argues that interest in APEC is gradually diminishing and the importance of bilateral deals and new regional initiatives such as ASEAN+ 3 is increasing in Pacific Asia. The failure of APEC to assist the Pacific Asian countries during the East Asian economic crisis in the late 1990s may be a contributing factor in this regard.